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Zachary Karabell on the European Debt Crisis: Watch Video

Zachary Karabell talks about what Europe’s debt problems mean for us—and why we shouldn’t be scared.

So what’s the worst that can happen? And is it likely?

Some say we’re looking at another catastrophe on the scale of what we went through in the fall of 2008. Karabell argues that’s probably not going to happen.

If there’s so much at risk, why aren’t Europe’s leaders taking more decisive action?

It sure seems as if this crisis has been going on a long time; is there a timidity among Europe’s political and financial elite? Not really, says Karabell. Getting anything done when 17 countries have to ratify any decision means things take time.

What else don’t Americans understand about the situation?

Plenty. Karabell discusses how the crisis has been seen as a sign that the European Union is going to collapse—a claim he disputes.

Speaking of the U.S., we have problems, too. Will ending the Bush tax cuts for millionaires help?

It will help symbolically, says Karabell. But ending the Bush tax cuts for millionaires won’t end America’s debt problems.

Bottom line: how will markets look in six months?

No one knows for sure, but Karabell points out that businesses have been far more optimistic than the public about Europe’s problems. Unfortunately, that hasn’t translated into a real recovery for the jobless.